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Silent on probe reports, China's Anbang says chairman steps aside

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Silent on probe reports, China's Anbang says chairman steps aside

China's Anbang Insurance Group Co Ltd said on Tuesday its chairman was no longer able to fulfill his duties within the company for "personal reasons," days after it denied he had been barred from leaving China.

Chairman of Anbang Insurance Group Wu Xiaohui attends the China Development Forum in Beijing, China, March 18, 2017. REUTERS/Thomas Peter

14 Jun 2017 08:17AM(Updated: 14 Jun 2017 09:41AM)

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BEIJING/NEW YORK: Anbang Insurance Group, one of China's most aggressive buyers of overseas assets, said late on Tuesday that its chairman was no longer able to fulfill his duties, just over a week after denying reports he had been barred from leaving the country.

The brief statement, citing only unspecified personal reasons for moving Wu Xiaohui aside, came hours after Chinese magazine Caijing reported the chairman had been taken away for investigation. The article, citing unnamed sources, was taken down shortly after it was posted online.

Anbang said Wu's duties would be managed by other senior executives, and that its business was operating normally. No other details were provided.

Best known overseas for its 2015 purchase of New York's landmark Waldorf Astoria hotel, Beijing-based Anbang has pursued a string of high-profile foreign acquisitions under Wu.

After a spate of successful deal-making worth over US$30 billion, Anbang ran into recent roadblocks, failing to close on a handful of investments, and facing criticism over the firm's opaque shareholding structure.

When asked if Wu was within China or if he could be reached, a spokesperson for Anbang - which manages some 1.65 trillion yuan (US$242 billion) worth of assets - said the company had nothing to add.

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Anbang earlier this month denied a Financial Times report that Wu had been prevented from leaving the country, citing four sources who had business dealings with him.

That statement fueled speculation about Wu's well-being, at a time when Chinese business circles were already spooked by the mysterious disappearance of a China-born billionaire from Hong Kong early this year.

Calls to Wu's mobile phone went unanswered.

RISE TO PROMINENCE

Established in 2004 by Wu as an automotive and property insurer, Anbang has risen from near-obscurity over the past few years to headline-grabbing prominence, buying Dutch insurer Vivat, South Korea's Tong Yang Life Insurance and Strategic Hotels & Resorts in the United States.

It has also taken significant stakes in a handful of listed domestic banks and property firms, including China Mingsheng Banking Corp , Agricultural Bank of China and China Vanke .

The vertiginous rise has also brought unwanted attention.

One of Anbang's units was censured by China's insurance regulator in May for designing products to skirt a regulation aimed at curtailing risk. As a result, the unit was barred from issuing new products for three months.

Outside of China, Anbang's deal-making has faltered as well. Its planned US$1.6 billion takeover of U.S. annuities and life insurer Fidelity & Guaranty Life collapsed in April after failing to get the required U.S. regulatory approval.

Attempts by the Chinese insurer to invest in a real estate project affiliated with U.S. President Donald Trump's son-in-law floundered.

Anbang has also became embroiled in an unusually public war of words with a leading Chinese business magazine, Caixin, about the insurer's ownership structure.

In an article published in April, the magazine had described Anbang's structure as "opaque" and said its funding was a "maze" of capital flow involving more than 100 firms. Anbang, in response, called the descriptions "malicious" and "inaccurate" and has threatened to sue.

The company later said it filed a lawsuit in Canada against the author of the article.

Described by those who know him as smart and passionate, Wu is politically connected in China and has also cultivated relationships on Wall Street with the likes of private equity giant Blackstone Group LP , despite speaking little English.

(Reporting by Matthew Miller in Beijing and Koh Gui Qing in New York; Editing by)

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